In this paper, we successfully prepared FeSiAl powders passivated by aqueous phosphoric acid solution and studied the passivation process and magnetic properties. The SEM, XRD and XPS were used to tested the morphology and structure. From our study, we had confirmed that passivation and corrosion processes occur simultaneously and undergo competitive mechanism between them. In the later stage of the passivation, Al3+ and PO3− dominated the reaction process. After forming toroid-shaped magnetic core by cold compaction, soft magnetic properties like saturation magnetization, initial permeability, core loss and DC-bias had been tested and analyzed by VSM, B-H alternating current magnetic characteristic analyzer and Agilent 4284 ALCR meter. We found that ultrasound could improve the soft magnetic properties of core but reduce its permeability. Optimized magnetic properties (Ms = 117.91emu/g, μi = 33.02, Pcv = 614.1 mW/cm3, Δμ = 60.29% and Ms = 116.53emu/g, μi = 33.79, Pcv = 629 mW/cm3, Δμ = 58.11%) had been achieved for the FeSiAl SMCs with and without ultrasound for 10 min.